Average cost of first-time buyer home climbs 7% since May last year

The average cost of a home for a first-time buyer has seen a 7% rise since last May, according to new analysis by BuildScan.

In May of last year, the average first-time buyer in England was paying £207,068 for their first home, although this cost has now climbed by £14,675 to £221,743.

BuildScan analysed first-time buyer house prices from the Land Registry house price records, looking at how they have changed between May 2020 and the latest data available, which was for January 2021.
While the stamp duty holiday has helped boost buyer demand, BuildScan suggested the consequence has been a “sharp uplift” in house prices, and this is no different for those taking their first step onto the ladder.

The findings showed that some regions have seen a far greater increase, particularly in London, where the average first-time buyer is now paying £22,631 more to buy their first home than they were back in May of last year.

The North West (£16,870), the East of England (£14,739) and the South East (£14,266) have also seen some of the largest jumps in the average first-time buyer house price since the market reopened for business.

BuildScan founder and managing director, Harry Yates, commented: “Current market conditions remain very favourable for buyers, largely due to the ongoing low cost of borrowing and of course, the saving made via the stamp duty holiday.

“Unfortunately, the consequence of fuelling such demand is always going to be an uplift in property prices. As a result, the nation’s first-time buyers are now facing a considerably tougher challenge than they were less than a year ago, with house prices climbing by more than £70,000 in some areas.

“While they should still be able to secure a favourable rate of interest on their mortgage, the deposit required to do so will have increased, as will the time required to repay the sum borrowed. So while current government initiatives can be credited for revitalising the market, it’s important to also recognise the detrimental impact they’ve had for those already struggling to make it onto the property ladder.”

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